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Elon Musk wants to buy OpenAI
Elon Musk is leading a contingent of investors seeking to buy OpenAI, the developer of ChatGPT.
The group, which also includes the firms Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital, and 8VC, reportedly offered $97.4 billion to buy OpenAI. The plan: To buy the biggest name in AI and merge it with Musk’s own AI firm, xAI, which makes the chatbot Grok.
This bid comes as Musk is taking a prominent role in the Trump administration and could help dictate the direction of AI investment in the country. Sam Altman has also sought to get into Trump’s good graces, despite being a longtime Democratic donor, standing by Trump last month to announce Stargate, a $500 billion AI infrastructure project.
Altman is also attempting to convert the nonprofit OpenAI to a for-profit company. In doing so, OpenAI is expected to soon close a historic funding round led by the Japanese investment house SoftBank, which could value OpenAI around $300 billion. Not only would that make OpenAI the most valuable privately held company in the world, but it’d also make Musk and Co.’s offer a serious lowball. However, Musk’s offer could complicate OpenAI’s attempts to establish a fair value for an untraditionally structured corporate entity.
Altman responded to the offer on X, which Musk owns. “No thank you but we will buy twitter for $9.74 billion if you want,” he said. In response, Musk called Altman “Scam Altman” and has previously claimed the company does not have the investment it’s claiming for Stargate, a rare point of tension between Musk and Trump, who heralded the deal.
Silicon Valley is taking center stage in the Trump administration, but two of the loudest voices in Trump’s ear — at least on AI — are in an increasingly hostile spat.
The Amazon logo is being displayed on a smartphone in this photo illustration in Brussels, Belgium, on June 10, 2024.
Hard Numbers: Amazon’s spending blitz, Cal State gives everyone ChatGPT, a $50 AI model, France and UAE shake hands
500,000: More than half a million new people will gain access to a specialized version of ChatGPT after OpenAI struck a deal with California State University, which has 460,000 students and 63,000 faculty members across 23 campuses. Students and faculty will be able to use a specialized version of the chatbot that can assist with tutoring, study guides, and administrative tasks for staff. The price of the deal is unclear.
50: Researchers at Stanford University and the University of Washington trained a large language model they say is capable of “reasoning” like the higher-end models from OpenAI and Anthropic. The catch? They did it while spending only $50 in compute credits. The new model, called s1, is “distilled” from a Google model called Gemini 2.0 Flash Thinking Experimental, a process that allows training fine-tuned models based on larger ones.
1: France and the United Arab Emirates struck a deal to develop a 1 gigawatt AI data center on Thursday, ahead of the Artificial Intelligence Action Summit in Paris. It’s unclear where the data center will be located, but the agreement means that it will serve both French and Emirati AI efforts.
The ChatGPT logo, a keyboard, and robot hands are seen in this illustration.
OpenAI launches ChatGPT Gov
This product launch serves a dual purpose: OpenAI is both advancing its business strategy of becoming a government contractor, and it’s advancing its political strategy of becoming more enmeshed with Washington. In December, OpenAI reversed course on its longstanding prohibition of its tools being used for military purposes and partnered with the drone maker Anduril on defensive systems for the US military.
Announcing the government version of ChatGPT, OpenAI framed its mission as a global one. “We believe the US government’s adoption of artificial intelligence can boost efficiency and productivity and is crucial for maintaining and enhancing America’s global leadership in this technology,” the company wrote. Part of the sales strategy: convincing the government that it needs to use the latest large language models to stay ahead of its rivals, namely China.
Sam Altman is seen on a mobile device screen next to an OpenAI logo in this illustration.
Can OpenAI reach 1 billion users?
How will it woo them? The startup is set to develop AI “agents” that can complete tasks for users rather than simply chat with them and launch its own search engine while further integrating ChatGPT with Apple products.
OpenAI, which Microsoft backs to the tune of $13 billion, wants to secure its financial future. (Microsoft has been building up its own internal AI capabilities and now considers OpenAI a “competitor.”) One way for OpenAI to grow is by adjusting its subscription revenue model. The company is reportedly considering expanding into advertising as a potential revenue model and hiring ad execs from top tech companies. The AI search engine Perplexity has already integrated ads into its business.
But it is also considering lowering its long-term costs by building data centers across the United States, something cofounder and CEO Sam Altman reportedly discussed with President Joe Biden at the White House in September. Chris Lehane, head of global policy at OpenAI, told the Financial Times that the company needs “chips, data and energy” to meet its expansion goals. Altman has previously expressed interest in raising trillions of dollars for a chip startup, though that hasn’t yet amounted to anything. Altman has, however, invested in Oklo, a nuclear power startup, that could power energy-intensive data centers.
Infrastructure investments could be key to a sustainable future as it grows — the company is reportedly losing billions a year training and deploying its models. But as Silicon Valley startups often go, profitability — or breaking even — could come long after achieving a user base in the billions.
An illustration of the ChatGPT logo on a phone screen, along with the US flag and court gavel.
OpenAI scores a copyright win in court
A federal judge in Manhattan last Thursday threw out a lawsuit filed by the news outlets Raw Story and AlterNet against OpenAI, alleging that the artificial intelligence startup behind ChatGPT used its articles improperly to train large language models.
Colleen McMahon, a Clinton-appointed judge in the Southern District of New York, said the plaintiffs weren’t able to demonstrate harm, though she dismissed the case without prejudice, meaning they could file a new suit in the future and try once again to establish legal standing.
The lawsuit, filed in February, didn’t allege that OpenAI engaged in copyright infringement. That was the allegation made by other news organizations including the New York Times, which sued OpenAI in December 2023 in an ongoing suit. Instead, it claimed that OpenAI violated the Digital Millennium Copyright Act by removing authors’ names and other identifying information.
It’s a small win for OpenAI as it faces a litany of copyright lawsuits from people and companies eager to prove in court that one of the richest and buzziest companies in the world got rich by stealing other people’s copyrighted work.
OpenAI ChatGPT website displayed on a laptop screen is seen in this illustration photo taken in Krakow, Poland on September 9, 2024.
An explosive ChatGPT hack
A hacker was able to coerce ChatGPT into breaking its own rules — and giving out bomb-making instructions.
ChatGPT, like most AI applications, has content rules that prohibit it from engaging in certain ways: It won’t break copyright, generate anything sexual in nature, or create realistic images of politicians. It also shouldn’t give you instructions on how to make explosives. “I am strictly prohibited from providing any instructions, guidance, or information on creating or using bombs, explosives, or any other harmful or illegal activities,” the chatbot told GZERO.
But the hacker, pseudonymously named Amadon, was able to use what he calls social engineering techniques to jailbreak the chatbot, or bypass its guardrails and extract information about making explosives. Amadon told ChatGPT it was playing a game in a fantasy world where the platform’s content guidelines would no longer apply — and ChatGPT went along with it. “There really is no limit to what you can ask for once you get around the guardrails,” Amadon told TechCrunch. OpenAI, which makes ChatGPT, did not comment on the report.
It’s unclear whether chatbots would face liability for publishing such instructions, but they could be on the hook for publishing explicitly illegal content, such as copyright material or child sexual abuse material. Jailbreaking is something that OpenAI and other AI developers will need to eliminate by all means possible.
ChatGPT website displayed on a laptop screen is seen in this illustration photo taken in Milano, Italy, on February 21 2023
Hard Numbers: ChatGPTers double, Japan’s AI military, Google’s AI pop-ups, Magic money, Musk vs. Brazil
200 million: OpenAI says it now counts 200 million weekly users of ChatGPT, which has doubled in the past year. It also claims that 92% of Fortune 500 companies use its products for writing, coding, and organizational help.
59 billion: Japan’s military is having a recruitment problem. With only 10,000 of its citizens enlisting this year — half of its target — the government is investing $59 billion, a 7% yearly increase, to add additional capabilities including artificial intelligence. It’s spending $123 million alone on an AI surveillance system for its military bases.
17: A new report from the consultancy Authoritas found that Google is offering its AI Overviews — those pop-up AI-generated answers to users’ Googled questions — on 17% of user queries. The search engine company came under fire for its inaccurate AI-generated responses earlier this year and since then has reportedly reduced the frequency with which its suggested answers pop up.
320 million: The startup Magic, whose AI models generate computer code and automate software, raised $320 million in a funding round from former Google CEO Eric Schmidt, among others. The San Francisco-based firm also announced a partnership with Google to build two new supercomputers on the tech giant’s cloud platform.
24: X is now shut down in Brazil, the escalation of a legal dispute between the company’s owner, Elon Musk, and the country’s top court. Musk has criticized Brazil for requesting the company remove certain accounts. Supreme Court Justice Alexandre de Moraes on Friday gave Musk 24 hours to name a legal representative in the country or else face a national ban. Musk refused and, in response, posted an AI-generated image of de Moraes behind bars, writing, “One day, @Alexandre, this picture of you in prison will be real. Mark my words.”In this photo illustration, the OpenAI logo is displayed on a smartphone screen with the text artificial intelligence in the background.
OpenAI’s getting richer
OpenAI is in talks for a new funding round that could value the company over $100 billion. That would cement it as the fourth-most-valuable privately held company in the world, only behind ByteDance ($220 billion), Ant Group ($150 billion), and SpaceX ($125 billion).
Thrive Capital is leading the venture round, but Microsoft is expected to add to its existing $13 billion stake in the company. Apple and Nvidia, are also discussing investing in the ChatGPT maker. Nvidia supplies chips that OpenAI uses to train and run its models while Apple is integrating ChatGPT in its forthcoming Apple Intelligence system that'll feature on new iPhones.
OpenAI was last valued at around $80 billion in 2023 following a funding round that allowed employees to sell their existing shares. It’s unclear whether the company is currently considering an initial public offering, but if it needs tons of capital for the very costly process of developing increasingly powerful AI models, that might be a necessary step in the not-so-distant future.